Looking for leverage in PAC markets: Corporate and labor contributions considered

Gerald Keim and Asghar Zardkoohi

Public Choice, 1988, vol. 58, issue 1, 34 pages

Abstract: In this paper we explore the popular perception that political action committees (PACs) have substantial influence over elected legislators. We question whether the leverage in the PAC market is on the side of the contribution-maker or the contribution-taker. Analysis of the structure of PAC markets suggests most markets are sellers' markets, not buyers' markets. PAC contributions then may be more like protection money than attempts to buy votes or access. The leverage of the politician (seller) may be tempered if a substantial number of large PACs have homogeneous interests, and the ability to concentrate their contributions to the same legislators. This contention is supported by analysis of differences in labor and corporate PAC giving in the 1980 and 1984 general elections. Labor PACs, which are much larger than corporate PACs, have more homogeneous interests, give virtually all of their money to one party, and appear to have more discretion in making contribution decisions than do corporate PACs. An implication of this analysis for corporate executives is that using political action committees at the federal level may not be a strategy where corporations have a comparative advantage. — Senator Robert Dole (R-Kan.) — Senator Thomas Eaglecton (D-Mo.) Copyright Kluwer Academic Publishers 1988

Date: 1988
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DOI: 10.1007/BF00183326

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